Jeffrey D. Sadow is an associate professor of political science at Louisiana State University Shreveport. If you're an elected official, political operative or anyone else upset at his views, don't go bothering LSUS or LSU System officials about that because these are his own views solely.
This publishes Sunday through Thursday with the exception of 7 holidays. Also check out his Louisiana Legislature Log especially during legislative sessions (in "Louisiana Politics Blog Roll" below).

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4.3.13

Bills to privilege state laid off employees unjustifiable

Mondays are slow news days,
so today the Baton Rouge Advocate
took out of the can a piece
about a bill introduced the week before last that makes one wonder just how much
the legislation’s author knows about state retirement regulations and/or the
free market.

State Rep. Regina Barrow
has introduced bills that would create exceptional treatment for long-time
employees of the state hospital system. According to the budget
to be considered this year, about 95 percent of them will lose state jobs as
eight of 10 charity hospitals will be administered by nongovernment entities by
Jul. 1. (Number seem to differ – the budget reports about 8,200 positions will
evaporate, while retirement system official indicate at least 8,400 employees
are covered. Neither have layoff plans yet been presented to the Department of
State Civil Service.) However, it is anticipated that the contractors will rehire
around 90 percent of those laid off.

Essentially, HB
34 would allow those laid off to transfer their retirement contributions and
those put in by the state to another retirement plan, and HB
35 would allow the early drawing of retirement benefits by those eligible
in years served. This preferential treatment that almost certainly would increase
costs to the state (final calculations have yet to be completed) Barrow justifies
by saying “I don’t want employees to have to suffer because of decisions of the
state. They did not choose to retire.”

Describing Barrow’s offering
HB 34 as “ironic” understates. Last year she opposed
(twice)
what became Act
483, setting up a cash balance plan for new hires into much of the state’s
bureaucracy beginning this Jul. 1. And one of the features of this plan is …
wait for it … a portability of benefits provision just like she now for a
select few suddenly champions that then she opposed for all.

As for her rationale for
both bills, perhaps “uninformed” does the job as a descriptor. For one thing,
she confuses the terms “retire” with “laid off.” With the disappearance of
these jobs, nobody is forced into retirement, they are just laid off. Those
subject to it as a response may choose to retire from working if they wish, but
no such choice is being forced upon them; again, the vast majority of them probably
will be rehired if they want to work in their same job. And for those who aren’t,
there are other jobs out there for them if they are capable of performing them
at least as well as anybody else in them.

She also seems unaware of
seeing beyond government employment as a lifetime promise. Perhaps she doesn’t
know that millions in the private sector, many previously laid off, who want to
work but cannot because of the Pres. Barack Obama
economy, whose strategy of economic management is to stifle job growth in order
to transform American society into one of dependency on government and creation
of an entitlement culture. Yet using her logic, with fewer
people working today than when Obama took office despite population growth,
all of those private sector entities that laid people off made them “suffer because
of [their] decisions,” and that these laid off “did not choose to retire.” So
why do state government employees, according to her logic, then get special
treatment? This she does not address nor answer.

The fact is, typically Louisiana
state employees can draw retirement pay beginning at age 55 (some earlier or
later depending on age of hiring, occupation, and years of service). Further,
it’s probably going to be pretty generous, as the typical state employee will
retire at a rate computed at 3 1/3 percent times years of service times last
years of salary averaged. In other words, let’s say someone hired right after
college has stayed 30 years with no raises in the past three years but now is
being laid off at 52. In three years, he can begin drawing his final salary in
a pension for the rest of his life (and his spouse if she outlives him) – and work
another non-Louisiana-government job on the side as well. Sweet; if private
sector employees, who in jobs with similar tasks generally have to work much
longer at higher salaries to draw as much out of their IRAs or 401(k)s and
equivalents, don’t rush the Capitol in protest when learning of this kind of
deal, nothing will ever move them to do so.

As for this hypothetical
example, instead of going out and finding another job to tide over until
hitting 55 – maybe not as good or plush of one – or using up savings or making
other members of the family work or work more, Barrow wants to allow this
person (or one with as few as 25 years in) to be able to retire immediately and
draw three extra years. Or, to withdraw the extremely generous assets out of
the retirement system in a manner she previously opposed and pour them into another
retirement plan elsewhere, thereby (except under unusual circumstances) increasing
the unfunded accrued liability that taxpayers will have to pick up.

Why should state government employees be so additionally privileged? Why
must they be shielded from the real world difficulties faced by so many in the
private sector? There’s simply no justification for this. Life’s tough all
over; for those able-bodied and who can work, government shouldn’t owe you
anything more than temporary assistance for temporary bad fortune – even and especially
if you worked for government. Thus, Barrow’s bills deserve their own speedy
retirement.

State employees that have 25 years of service are the only ones that would be affected by HB35. I have been an employee at a state hospital for 29 years and have accepted much lower pay than the private sector because of the promise of retirement and the ability to keep my insurance. Any employee that does not retire while still actively employeed can not keep his/her insurance. So in order to keep my insurance, I must retire early and accept a drastic actuary reduction just to be able to keep insurance. I could have left for the private sector 29 years ago or never worked for the state if I knew I would be treated this way just to prop up an individuals statistics so he could run for president. The state will not save money. In my community the state facility was taking care of psychiatric patients for 1.5million dollars per year in the charity hospital, Jindal closed the unit and the patients were moved to a private facility that now charges the state 5 million per year. This is all a numbers game to decrease employees that have been loyal and dedicated only for the advantage of one person.

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